FTC Charges Debt Collection Business Defrauded Consumers into Paying Debts They Did Not Owe

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The Federal Trade Commission charged a Georgia-based debt collection business with tricking people into paying money for debts they did not owe. A federal court temporarily halted the scheme and froze its assets at the FTC’s request.

According to the FTC’s complaint, the business is “founded on false claims that consumers have committed a crime and face dire consequences – including a lawsuit, garnishment, and even imprisonment – if a purported debt is not paid.”

Since January 2015, the defendants have used these tactics to collect more than $3.4 million from consumer victims. They have also made false or unsubstantiated claims that people owe money, illegally contacted consumers’ friends, non-spouse relatives, and employers, and failed to provide statutorily-required written notices and disclaimers.

The Commission vote approving the complaint was 2-0. The U.S. District Court for the Northern District of Georgia entered a temporary restraining order against the defendants on October 25, 2017.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.